THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.

CAMPBELL BROWN, CNN ANCHOR: Hey there, everybody.

What happens when you shut down a prison full of terror suspects? President Obama ready to find out.

Bullet point number one: all detainees ordered out of Guantanamo Bay by one year from today. Tonight, we're asking, where will they go? What country, what state is willing to take these people considered a threat to our lives? We will also have details of the president's very busy third day in office, including a visit to the State Department and Secretary Hillary Clinton.

Bullet point number two: Why is Rush Limbaugh already saying he hopes the president will fail? You will hear the answer from him. And the battle for the soul of the Republican Party will be a topic of discussion tonight. With President Obama's approval ratings high, how do Republicans try to get what they want?

Bullet point number three: The day after Caroline Kennedy gives up on Hillary Clinton's Senate seat, no one is saying exactly why. Tonight, a source tells CNN Kennedy's chances of being appointed weren't so good after all.

And bullet point number four: more of what you didn't see on Inauguration Day. A "TIME" magazine photographer got closer than just about anyone to President Obama on Tuesday. You are going to view some amazing behind-the-scenes images. We will tell you the official White House answer, also, to the very burning question, will the president get to keep his PDA?

But, first, "Cutting Through The Bull." And, tonight, we have it by the car load.

John Thain, the former CEO of Merrill Lynch, resigned today from the company that bought Merrill Lynch out, Bank of America. As far as we could tell, his departure couldn't come soon enough. Not long ago, Thain was credited with keeping Merrill live long enough to be rescued. Well, now we learn the man who asked for and then quickly withdraw his request for a $10 million bonus still managed to live pretty large while Merrill teetered on the brink and workers paid the price.

According to our friends at CNBC, Thain spent more than $1.2 million in company funds to spruce up his office, hiring a world-class designer to decorate in full decadence. The list includes an $87,000 area rug, $28,000 for curtains, a $68,000 credenza, and the perfect finishing touch, a $1,400 wastebasket.

This is what passes these days for corporate responsibility, CEO John Thain picking out fancy new curtains while the walls come tumbling down.

Here with me now to follow up on this and a lot more, CNN chief business correspondent Ali Velshi.

So, explain it to me, Ali. I mean, how does this happen?

(CROSSTALK)

ALI VELSHI, CNN CHIEF BUSINESS CORRESPONDENT: John Thain was a hero on Wall Street. He replaced Dick Grasso, who was sort of kicked out of New York Stock Exchange -- he was the head of it -- for excess.

And John Thain came in there, an ex-Goldman guy. Then he went over to Merrill Lynch, replacing a CEO who had been held responsible for the write-offs at the company, billions of dollars.

Now, if you're going to come in to be the fix-it guy, why would you think this sort of thing is appropriate? You and I have talked about this sort of thing before. And I have referred to it as being tone-deaf. This is so much further than tone-deaf. This is a responsibility that you have to shareholders to say that, as you said, the walls are coming down; you can't be spending people's money this way. It's really outrageous.

BROWN: And, to be clear, though, this wasn't necessarily TARP money.

VELSHI: No.

BROWN: This wasn't TARP money that he was...

VELSHI: Merrill Lynch was never a recipient of TARP money.

BROWN: But...

VELSHI: This was the shareholder money. Merrill Lynch has since been bought by Bank of America. So, now that the money all gets sort of muddled and mixed. So, we're all kind of owners of the operation now. I would like my money back.

(CROSSTALK)

BROWN: I know, because all of these banks are essentially asking for bailouts at the moment. We all personally have a stake in this.

(CROSSTALK)

VELSHI: We are very invested. But, remember, before we were even invested as taxpayers, one of the great things about our system is that people could invest in public companies and retire well, because those companies made money. You can make money in this country responsibly. This was just the wrong thing to do. And it should send a message out there to all those other CEOs. We don't begrudge them a good earning. We understand that the CEO doesn't earn minimum wage and that you need to pay them a certain amount in order to get the best people.

This is outrageous. When you lay people off in your company, you don't have a right to spend that kind of money.

BROWN: So, in your opinion, is this a short-term P.R. problem for Wall Street or do they have a really long-term problem on their hands in terms of how people think about...

(CROSSTALK)

VELSHI: I don't know how they could fix it. I wish they had sort of thought about this ahead of time to say, we are going to take so much taxpayer money and so much attention, what can we do to say we hear it; we get the message; everybody is having a tough time; we're going to carry our own pail and get through this?

It's outrageous. And Bank of America has been very silent about this. We had to attribute this to our colleagues over at CNBC, who reported, because when we called Bank of America, they said, this isn't why John Thain resigned today.

So, they didn't tell us it wasn't true. Come on. Fess up. Tell us what's wrong. Tell us what's wrong on the books. Tell us what's wrong about the way you run your companies and change the way you behave and we will all get through this together. But it's very frustrating when we have real issues out there that our viewers need to know about, that we're saddled with this nonsense. I really hope it stops soon.

BROWN: Too many stories like this.

VELSHI: Yes.

BROWN: Ali Velshi for us tonight -- Ali, thanks.

Coming up: President Obama all smiles at the White House today in the press room after the serious business of closing Gitmo. We're going to look at how he plans to do that exactly.

And you heard the president talk of ending secrecy in Washington, speaking of transparency. Well, does that also include his smart phone? We are going to show you the one he may use to keep his calls and e-mails confidential, nothing like your PDA.

Speaking of secrets, we're also going to show you never-before- seen photos from Inauguration Day, unprecedented access to the new commander in chief.

Right now, take a look at what the former CEO Merrill Lynch's CEO -- his driver makes, compared to a man with a bit more on his plate. Does that look like justice? NO BIAS, NO BULL returns in a moment.

(COMMERCIAL BREAK)

BROWN: Today, President Obama signed executive orders banning the torture of terror suspects and closing the Guantanamo Bay military prison.

The new president said that America's moral example must be, in his words, the bedrock and beacon of its global leadership. President Obama has been boldly using his pen to make big changes from the Bush administration's policies.

And under the new president's orders, the detention center will close in one year. There are about 245 terror suspect there. The U.S. try to try to transfer some of them to other countries. Other detainees may be prosecuted in the U.S.

The president set up a Cabinet-level panel to figure out what to do with the rest.

And we have got senior White House correspondent Ed Henry with us now, who has all the latest details.

And, Ed, I guess the big question is, how is he going to do it? What is going to happen to all those prisoners?

ED HENRY, CNN WHITE HOUSE CORRESPONDENT: Well, Campbell, I asked that very question today to Robert Gibbs in his first on-camera briefing, the new press secretary. What do you do with those 245 detainees?

He basically said, look, it's only day two, essentially. Give us time.

It's actually day three. I think time is moving quickly. And they have to deal with this in the weeks to come. He obviously fulfilled a campaign promise by actually signing this executive order, so he's going to get credit from his supporters for doing that.

But now is the heavy lift. As you mentioned, you could try to get some foreign countries to pick up some these detainees. So far, not a lot of foreign countries have stepped up and shown a willingness to do that. You could shift them to maximum security prisons within the United States.

But there are Democratic governors and senators in some of these states like Kansas who don't want to actually take these detainees. These are big-time terror suspects. And it's going to be very difficult legally to deal with all of the next steps.

And that's why this today was really just one step to show a break from the Bush administration in terms of how you execute the war on terror.

But this is going to be very tricky, both legally and politically, in the days ahead for President Obama to figure out how exactly to handle this without looking like he's soft on terror. It's going to be a very, very tricky balancing act, Campbell.

BROWN: And, Ed, another issue came up today, and some people are wondering whether the administration is actually going to live up to the high ethical standards that the president spelled out very specifically yesterday, like this new guideline.

Let's listen.

(BEGIN VIDEO CLIP)

BARACK OBAMA, PRESIDENT OF THE UNITED STATES: As of today, lobbyists will be subject to stricter limits than under any -- under any other administration in history.

If you are a lobbyist entering my administration, you will not be able to work on matters you lobbied on, or in the agencies you lobbied during the previous two years.

They are running into some trouble now from fellow Democrats, who are concerned that William Lynn was picked to be deputy defense secretary, and it turns out that he has been a Raytheon lobbyist. They have a lot of defense contracts, obviously. So, this is somebody who is going from the defense industry into the exact kind of policy- making apparatus that he has been lobbying on.

It would seem to violate the exact standard that President Obama himself laid out yesterday. And so I pressed Robert Gibbs about that today. He said that they may get a waiver for William Lynn, so that he can get past those standards. Within 24 hours, they are talking about a waiver for the very ethical standards that the president laid out.

That may not be good enough for some of their fellow Democrats. Carl Levin, the Senate Armed Services chairman, is saying there may be so many questions now moving forward, they may not be able to get this number-two official at the Defense Department, a big job at the Pentagon, through.

So, it shows how some of the high standards they are setting in this first week may be hard for this administration itself to follow -- Campbell.

BROWN: And, Ed, finally, I know the president made a surprise visit down to the press briefing room today. He had some nice words for reporters. Let's listen.

(BEGIN VIDEO CLIP) OBAMA: We will try to have a relationship that's respectful and where you guys feel like are you actually getting answers. Gibbs is going to do his best. And I'm very proud of him today. And, you know, he got a fist bump from me.

(LAUGHTER)

(END VIDEO CLIP)

BROWN: All right, so, Ed, you were down there when he showed up. What happened? He just caught you all off guard a little bit?

(CROSSTALK)

HENRY: It was funny. All of a sudden, there was -- you have been at the White House before covering it, and there's an overhead page saying all press get up to the briefing room right now.

So, we thought there was some sort of a national emergency. Instead, it was the president of the United States. He was just glad- handing, basically. In fact, when one of my colleagues starting to ask him about that William Lynn lobbying story, he started saying, hey, hey, I'm not here to take any questions. I will do that at a later date. I'm here just to meet you guys and shake some hands.

So, he don't want to answer some of those tough questions just yet. But I guarantee, once there is a press conference, we will get it. We will get those questions to him.

BROWN: Well, yes, he's going to have to.

HENRY: He will have to.

BROWN: A lot of transparency pledges made yesterday and there's going to be a lot of follow-up, certainly.

Ed Henry for us tonight -- Ed, thanks very much.

When NO BIAS, NO BULL returns, a debate on one of the president's most pressing problems -- what to do with those terror suspects at Guantanamo. We will talk about that, Americans very split on this. Is it a mistake to close the prison down, as the president has just ordered?

And then a little bit later, has Rush Limbaugh gone too far when he answered the question, do you want Barack Obama to succeed? It sure got us wondering. We will talk about that.

(COMMERCIAL BREAK)

BROWN: Tonight, as the president moves swiftly to close the prison at Guantanamo Bay, the republic remains deeply divided. Check out this new CNN/Opinion Research Corporation poll. Fifty-one percent (AUDIO GAP) say shut it down, but 47 percent say keep it open.

I-Reporter Katy Brown raises a point that's troubling lots of people. Take a listen to this.

(BEGIN VIDEO CLIP)

KATY BROWN, CNN I-REPORTER: I do agree with Obama as far as there should be no torture. I understand that.

But what I don't understand is, CNN reported that 60 of the detainees will be moved into the United States. And, as we all know, that means that they will get American rights in court. These are the men that tried to hurt Americans or America, or even other people, at that.

And, you know, they are going to come in the United States and get the rights that our American soldiers fought for. And I'm sure we can all agree that there is something not right with that.

(END VIDEO CLIP)

BROWN: OK. We are going to turn now to our panel of experts.

We have got CNN national security analyst Peter Bergen, author of books on books on Osama bin Laden and al Qaeda, Cliff May, a former Republican Party spokesman and now president of Foundation for the Defense of Democracies and Anti-Terror Research Center, and CNN senior legal and political analyst Jeffrey Toobin joining us as well.

So, Peter, let me just start with you on this question -- 245 people estimated suspected terrorists at Gitmo, who are these people? I mean, are we talking about the worst of the worst? Who is still being held there? What are they suspected of?

PETER BERGEN, CNN TERRORISM ANALYST: Well, 60 of them have been cleared for release by the Bush administration. You have got about 100 Yemenis in there. Yemen is a country with a rather inadequate prison system, so they haven't been sent back to Yemen.

You have got 20 high-value al Qaeda people in there who are certainly serious terrorists and then some other people that we don't really have a good sense of are they really engaged in terrorism or are they there -- are they sort of innocent? And that's of course one of the things that is happening with this 120-day review process, is to look at all these cases and say who should be released, who should be held, who should go to some form of trial, whether it's a military trial or a trial in a -- a federal court.

BROWN: And, Cliff, gives your view on this. I know you were obviously a big supporter of President Bush's policies. When Guantanamo Bay shuts down, do you believe that Americans are going to be at greater risk?

CLIFF MAY, PRESIDENT, FOUNDATION FOR THE DEFENSE OF DEMOCRACIES: Well, we don't know that yet.

I give President Obama credit for the symbolism of today. People just hearing about this story probably think he is or has closed Guantanamo down. He hasn't. His advisers now have a year to figure out what to do with the dangerous terrorists who are there.

Don't forget, people -- I have been to Guantanamo. It's not the place that is the problem. It's those who are there. Some can be released. Many hundreds have been released. About 60 of them, a little more than that, have returned to the battlefield.

What is a great danger -- and the young woman you had on expressed it -- is, once they come to the U.S., they will have the constitutional rights due Americans. Some of them -- Khalid Sheikh Mohammed was one of the masterminds of 9/11 -- you want to be careful that you don't have lawyers immediately saying, OK, now they have to be released, because they have to go to the -- you don't have evidence against them. Their confessions were coerced. You have to reveal your intelligence sources.

We don't want these people living in Atlanta. We don't want living in Miami, New York, or even Hollywood.

(CROSSTALK)

BERGEN: But that's kind of an absurd point.

(CROSSTALK)

BROWN: Hold on, Peter.

JEFFREY TOOBIN, CNN SENIOR ANALYST: I disagree completely. We have a legal system in this country that has tried Zacarias Moussaoui. It has tried the blind sheik. We have had terrorism trials.

These people are in prison. Our legal system is completely capable. We're talking about maybe 40 trials. That is the way the system is supposed to work, not through these secret detentions and endless holding people without charges. Let the system work. We have got a system -- legal system here that's done us very proud.

(CROSSTALK)

MAY: What you have to understand, Jeff -- and I think this is very important -- is that our soldiers abroad are not "CSI: Miami." They are not collecting evidence the way a detective would.

You right about 1993. The blind sheik went to jail. And the prosecutor was Andy McCarthy, who works for my foundation. And he's written a book which I commend to you called "Willful Blindness," which says that we cannot use the legal justice system in the war against terrorism alone, by itself.

You have sources and methods to protect in terms of intelligence, and you don't have soldiers gathering evidence on the battlefield. So, if these terrorists come to the U.S. and they have lawyers, as they will, as they do already, by the way, and they get out, what do you do with them? We would like to send them back to other countries. A lot of countries won't take them. We cannot have them released in the U.S. And we can't try all of them. We just can't.

(CROSSTALK)

BROWN: Peter, let me get you to weigh in on this. And this is more big picture. What do you make of the argument that Guantanamo has so tarnished America's image in the Muslim world that it's actually made us less safe in many ways because it's given terrorists something to rally around?

BERGEN: Well, there's no doubt about it. It's been a moral catastrophe, not only in the Muslim world, but around the world.

So, closing it is important symbolically. But I think we can all agree that closing Guantanamo, it's a physical place. What's really at discussion here is what is the legal framework into which not only the people in Guantanamo will go, but other people that we capture in the future?

Will they go to military commissions, as is the present situation, or will they go into a federal civilian court, or even face a regular U.S. Army courts-martial, which is also another option?

These are the various questions the Obama administration is going to weigh. But I believe completely with Jeffrey. When terrorists have been tried in the United States, they go away forever. The embassy attackers in '98 who blew up two American embassies, they are in prison for life without parole.

Ramzi Yousef, the guy who blew up the World Trade Center the first time, he's in prison for 240 years is in the SuperMax prison in Colorado, which is basically a living hell. It's almost preferable to be executed than be there.

So, the idea that somehow these terrorists are going to be released is just absolutely nonsensical.

BROWN: Go ahead.

TOOBIN: And Khalid Sheikh Mohammed, who is clearly the worst of the worst, he is under indictment in federal district court today in the embassy bombing cases. He could be brought there and be tried.

The legal system can work. The Obama administration is also considering creating some sort of new procedures if there are some people who can't be tried in federal district court, a national security court of some kind.

So, it does seem like the system should be given a try, after all these years.

(CROSSTALK)

BROWN: And, Cliff, I will give you the last word. Go ahead.

MAY: Jeffrey, I -- well, I agree with you on the idea of some new system for this, such as a national security court, which has been proposed by people like Andy McCarthy, who I mentioned, who was the prosecutor in 1993. I wish the Bush administration had moved forward on that, because I do think that, if we go back to the pre-9/11 view that terrorism is simply a criminal justice matter, we will not succeed in this fight that we have been fighting for 30 years, really, since, actually, Jeffrey Toobin's father sent me to Iran actually 30 years ago next month, when we both worked for Channel 13.

MAY: It was a journalistic assignment for Bill Moyers' show 30 years ago, Jeffrey.

TOOBIN: OK. Terrific.

BROWN: All right. OK. To Peter, to Cliff, and to Jeff, thanks a lot, guys. Appreciate it.

MAY: Thank you.

BROWN: Also ordered by President Obama, a pay freeze for top administration officials. So, what happened today when reporters asked would the president consider taking a pay cut?

But, up next, Rush Limbaugh looks at President Obama's agenda and says -- quote -- "I want him to fail." We're going to look at that and the future of the GOP, NO BIAS, NO BULL, when we come back.

(COMMERCIAL BREAK)

BROWN: Rush Limbaugh is getting a lot of extra attention today for a jab he took at President Obama last night.

With the new administration just getting to work, and polls showing a huge majority of Americans backing the new president, listen to what Limbaugh said when Sean Hannity asked him if he wants President Obama to succeed?

(BEGIN VIDEO CLIP, "HANNITY'S AMERICA")

RUSH LIMBAUGH, RADIO TALK SHOW HOST: I want him to fail. If his agenda is a far-left collectivism, some people say socialism, as a conservative, heartfelt, deeply, why would I want socialism to succeed?

(END VIDEO CLIP)

BROWN: Now, being outrageous Limbaugh's stock and trade, but this has a lot of people crying foul out there. Does he speak for Republicans? We're going to ask our panel right now.

We have got Republican strategist and CNN contributor Ed Rollins with us tonight, Mark Halperin, editor at large and senior political analyst for "TIME" magazine, and also Errol Louis -- I'm sorry -- I don't have your introduction in here -- with "The Daily News," who is always a member of our panel.

And good to have you back as well, Errol.

Mark, let me start with you.

Given Obama's popularity, his message about bringing the country together right now, is there an appetite out there for comments like that from Rush?

MARK HALPERIN, CNN SENIOR POLITICAL ANALYST: There isn't much of one. But Rush Limbaugh is one of the few Republicans who has got some fight in him now. And he does have a following. He does have a big audience.

It's off-key, though, for what the mainstream media, the dominant media has talked about. It's off-key for a lot of congressional Republicans. It's off-key for a lot of independents. So, right now, I think what's missing from here Limbaugh's critique is alternative ideas.

Just being someone saying, no, I want you to fail, without that extra sentence, and saying, here's what I believe instead, I think, is a big mistake right now and it's not going to get much of a following.

BROWN: Ed, I want you to listen to something else that Limbaugh said -- this was about the president -- last night. Listen.

(BEGIN VIDEO CLIP, "HANNITY'S AMERICA")

LIMBAUGH: We would know this. We don't know what he is. That's the whole point. And people don't care what he is. They don't care who he is. They care that he's black. They care that he's historic. They care that they think he's an intellectual because of the way he speaks. It's all about how he speaks.

I mean, I look at some of the facial expressions of people when they are watching the guy, and it's frightening.

(END VIDEO CLIP)

BROWN: So, Ed, you're a Republican. Your party is struggling right now to, frankly, show people that you're not a bunch of white guys.

ED ROLLINS, CNN SENIOR POLITICAL CONTRIBUTOR: Well, we are a bunch of white guys. And, obviously, we have got to be more than a bunch of white guys.

The reality is Rush is an entertainer. He's an old friend of mine. I like him. He's talking to his audience. But, at the end of the day, he didn't win because he was black. He won because he was a great candidate. He is an intellectual. Everything that he's done, he said he was going to do in the course of the campaign.

This is not like Jimmy Carter. Jimmy Carter, we didn't know who Jimmy Carter was when he got elected, because he had flip-flopped all over the place. Every single thing this man has done in the last few days, he promised he was going to do in the campaign.

So, we may not agree with it all, and we may want to fight it down the way, but it's what he said. And he won by 9.5 million votes and he got two-thirds of the electoral votes.

BROWN: Errol, right now -- let's see -- 96 percent African- Americans voted for Obama. And, right now, the two top candidates to lead the Republican National Committee are African-American.

Does having a black chairman of the party help sort of get through this? Or this like Band-Aid...

(CROSSTALK)

ERROL LOUIS, CNN CONTRIBUTOR: I don't think so. It smacks of tokenism, for one thing.

The fact that Michael Steele and Ken Blackwell, the two leading candidates -- or two of the leading candidates, are black, I don't know if that really gets to the problem. The problem is what you just showed, is a talk show host -- and, believe me, he's not the only one.

And they rant and rave month after month after month. They tried to convince their audience that what this election was about was about fear, about not knowing who this guy is, about socialism, throwing these words and insults around.

And, like Ed said, the electorate has just moved past that. And you see it in state after state, not so much in the deep red states, but in the swing states among independents. They don't want this stuff. They don't believe it. It's not true, to begin with. They don't want an entertainer. They have got real problems in their lives and they are looking for some leadership.

(CROSSTALK)

ROLLINS: The only thing I want to say about both Ken Blackwell and Michael Steele, they have both been elected. They are significant Republicans, have been over the years.

Ken is a very strong conservative who was elected secretary of state, treasurer, ran for governor. Michael was a lieutenant governor. I mean, they are significant people. They have the right to run.

BROWN: But no one is suggesting they're not significant people. But you just said yourself, you are the party of a bunch of white guys at this stage. And, so, isn't that a little bit unusual, that these two leading candidates would be African-American?

(CROSSTALK)

ROLLINS: I don't concede -- they are both strong candidates. I don't know if -- no one knows who is going to win that race -- 168 people are going to vote.

I think the key thing here, though, is they may have been tempted to get into the race because of Barack Obama. I don't think that's the magic answer. I think both of them would be good chairmen, but not for the reason that they're black.

BROWN: Mark, how does the Republican Party -- I mean, who -- when is a leader going to emerge? When is a message going to emerge?

HALPERIN: It's a real problem.

I have never seen, in my career, the party this weak. Ed and I were talking before. Even after Watergate, the Republican Party still had a lot of strengths in elected officials, fund-raising, support from the business community.

Barack Obama, if he runs for reelection, looking down the road will raise $1 billion. The Republican Party I think needs ideas generated - they need two things. They need ideas generated, they need charismatic leaders who talk about things they truly believe in. Right now they are looking both of those.

Now I don't see short-term things on the horizon either in terms of ideas or in terms of leaders. And Barack Obama and his team do not make a lot of mistakes. Do not create opportunities for Republicans. We saw that in the campaign. We've seen it in these early days in the White House.

BROWN: All right. We're going to end it there, Mark, Errol and Ed, thanks so much, guys. Appreciate it.

Coming up next, President Obama says he is going to freeze the salaries of top aides but what about his own salary? That question came up at the White House briefing today.

Also ahead, a White House first. We're going to show you what could be the shiny new presidential PDA and tell you why some White House staffers aren't happy with what they found in their new offices.

And then later, just when you thought you had seen it all, a spectacular new view of US Airways Flight 1549 caught on tape as it ditched into the Hudson River. We'll show that to you that as well. Stay with us.

(COMMERCIAL BREAK)

BROWN: In his first days in office, President Obama has moved quickly to show Americans he gets it. Times are tough.

So in a symbolic gesture, he has frozen the salaries of staffers that make more than $100,000. No raises this year, guys.

Obama's move provoked one reporter to ask White House Press Secretary Robert Gibbs a very interesting question today at his very first briefing. Take a listen.

(BEGIN VIDEO CLIP)

APRIL RYAN, AMERICAN URBAN RADIO NETWORKS: Is the president going to lead by example by returning money to the Treasury from his own salary or signing executive order to cut his salary?

ROBERT GIBBS, WHITE HOUSE PRESS SECRETARY: Well, I think his salary is determined by law.

RYAN: He says he wants to lead by example. He is the top. Should he lead by example?

GIBBS: We'll check on that.

(END VIDEO CLIP)

BROWN: All right. We asked national political correspondent Jessica Yellin to check on that for us. Jessica, what have you been finding out?

JESSICA YELLIN, CNN CORRESPONDENT: Well, Campbell, I was surprised to find out that the president make as a very healthy $400,000 a year. Not bad. And there are at least 100 white house staffers who make more than $100,000 a year themselves, that's based on what the Bush team made last year.

Now the top earners in the Obama White House, they would make $172,200 a year. And that would include Chief of Staff Rahm Emmanuel, Press Secretary Robert Gibbs and the president's lawyer, White House counsel Greg Craig.

Then coming in just below that at $158,500, the press secretary's number two guy, and then the mid level White House attorneys, the folks who work in the counsel's office, they would earn around $130,500 a year and then the president's personal aide, that guy you see carrying his bag and by his side at all times. Guess how much he makes? $102,000.

Now, the one side note is that the vice president makes just about half of the president's salary. $220,000 a year. Now, of course, all these people would make a whole on lot more money in the private sector. But not to worry, past administration officials have shown they do just fine when they leave government.

BROWN: They do indeed. They tend to cash in. Jessica Yellin for us tonight. Jessica, thanks.

The Caroline Kennedy for Senate saga won't quite go away. Today her staff put out a statement today scolding unnamed people for mud slinging. Coming up a NO BIAS, NO BULL look at who is saying what and who else is upset about this. But first, the pictures everyone will be talking about tomorrow. Newly released video moments after US Airways Flight 1549 ditched in the Hudson River. Stay with us.

(COMMERCIAL BREAK)

BROWN: Still ahead, what happened with Caroline Kennedy? It looked like she was on track to be the next senator from New York. And then it fell apart. What was really going on there? We have new details to share with you tonight. But first, Gary Tuchman is joining us right now with a briefing. Gary?

GARY TUCHMAN, CNN CORRESPONDENT: Campbell, we've got stunning new video tonight from the seconds after US Airways Flight 1549 splash landed in New York City's Hudson River. A surveillance camera shows the jet drifting for only a few moments, and then emergency chutes open and passengers climb out into the freezing cold. Investigators say they need another day or two to recover the plane's missing left engine from the river.

A delivery van hit a group of children in New York City's Chinatown today, killing two of them and injuring more than a dozen. Police say the van plowed backwards into the victims who were walking to their daycare center. It is unclear if the driver was in the van at the time.

Three men may be executed in China's deadly tainted milk scandal. The men were sentenced today as crowds of angry parents were kept outside, far from the courthouse. Six babies died and nearly 300,000 others got sick after the chemical melamine, which causes kidney failure, was added to milk apparently to cheat on quality testing.

Embattled governor Rod Blagojevich could file a lawsuit over his impeachment trial. The Illinois Democrat complains he won't be allowed to call witnesses when the trial starts on Monday. He has repeatedly denied charges of trying to sell President Obama's former Senate seat.

And in Hollywood, the Oscar nominees are out. Meryl Streep was nominated for a record 15th time. One year to the day after he died, Heath Ledger was nominated for best supporting actor as the Joker in the "Dark Night". And "Slumdog Millionaire" earned 10 nominations including best picture.

The story of an orphan in Mumbai, India seeking fame, love and success on a TV game show has just opened in Mumbai. Campbell, I am really embarrassed to tell you this but i have not seen "Slumdog" yet.

BROWN: I haven't seen anything, Gary. Don't be embarrassed to tell me.

TUCHMAN: OK.

BROWN: I have a long list to catch up on. Gary Tuchman for us tonight. Still ahead, they told us President Obama went to 10 parties after his inauguration. There was one more you never knew about. Some big stars were apparently waiting to welcome him, and that's not the only secret we're revealing about Tuesday. We're going to show you the intimate moments behind the scenes with Barack Obama practicing before the main event.

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BROWN: New details tonight on the early days of the Obama administration. The great Blackberry battle. Will he or won't he get to keep it? It appears to be over. But why are some Obama staffers complaining that the White House is in the computer stone age? We have more secrets to reveal in tonight's PDB, our political daily briefing.

Tom Foreman in Washington for us tonight. And Tom, we hear there is some PDA news in the PDB.

TOM FOREMAN, CNN CORRESPONDENT: Yes. You are absolutely right, Campbell. We normal folks take things like cell phones or e-mails for granted, but when you're president, life gets complicated. You may recall that Barack Obama, an admitted Blackberry addict, has been told he can't keep thumbing messages to his pals.

Now he's hitching a ride on the tech wagon to solve his problem. We're learning that he's now using a highly sophisticated super secure Batman like e-mail device called the Sectera Edge. Sounds good. Apparently this can fight off almost any attempt to eavesdrop on the president's conversations or read messages, it ought to. Costs about $3,000.

If you think about it, if Paris Hilton had one of those, maybe her phone wouldn't have been hacked and she could have been spared a lot of embarrassment, Campbell.

BROWN: Excellent point there, Tom. So I guess the price makes sense for a man who ran such a high-tech campaign. After all, he of course rallied millions of his supporters over the Internet.

FOREMAN: That's true. And as you might imagine, many of his staffers are part of the iPhone generation. But they got a rude awakening when they walked into their new White House digs we're told

They found old computers with such dated software they can't access outside e-mail or even their Facebook pages. The horror! OMG. It's upgrade time!

BROWN: And speaking of technology, there's also some news about a massive slowdown of Google, right? What happened?

FOREMAN: Yeah. And a political slowdown at that. Google is tres popular for peopling surfing the Web. It handles millions of queries every second.

But this week, Google saw their traffic plummet, briefly, mysteriously and dramatically. What was going on? Well, this graph released by Google tells the tale. At precisely noon on Tuesday, when President Obama was being sworn, the Google crowd pushed back from their keyboards and took a break. But you can see they were back at it moments later.

BROWN: Look at that spike. That's really cool.

FOREMAN: That's pretty cool. Yeah.

BROWN: So I also know that you have got scoop on a new look at the White House.

FOREMAN: I don't go to a lot of restaurant where I have to wear a jacket why should I wear one in my own house? Apparently President Obama feels the same way. The president is seen here sitting ate desk in the Oval Office in shirt sleeves. No jacket. You might recall that President George W. Bush had a pretty strict policy of no jacket, no service. Although he also broke that rule every now and then.

Other presidents have done the same. Ronald Reagan was adamant about wearing a jacket in the office. Bill Clinton, however, took a more casual approach. Look at that. Short sleeves. So maybe the new president is following his lead.

BROWN: All right. And finally, give us the lowdown on this one. What's this about the secret inaugural ball we've been hearing about?

TUCHMAN: Yes. All sports of secrets tonight. Apparently the 10 official inaugural balls weren't enough partying for the first couple. The two hosted a champagne toast at 1:00 a.m. at the White House. Who was there? Well, Oprah, of course. Senator Dick Durbin. Mayor Richard Daley of Chicago. Obama senior aide David Axelrod. And Obama advisor Valerie Jarrett to name a few. Although we're told the first lady did not stick around much after the toast. She went to bed. Which was probably a wise move. A very big week for the Obama family.

BROWN: I was going to say, I think she was entitled after the day she had and they both had. Tom Foreman for us tonight. Tom, thanks.

In a moment, the reversal of fortune for Caroline Kennedy. What happened? What secrets made her change her mind? We've got new details on that for you tonight.

And at the top of the hour, LARRY KING LIVE with Senator John McCain. You're going to hear why he's already questioning one of the president's first orders since taking office.

That's on LARRY KING LIVE top of the hour.

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(BEGIN VIDEO CLIP)

CAROLINE KENNEDY, FORMER U.S. SENATE HOPEFUL: I would be an unconventional choice. I haven't followed a traditional path, but I think I bring a lifetime of experience to this. In my family, public service is really the greatest honor that anyone can have.

(END VIDEO CLIP)

BROWN: Caroline Kennedy last month talking to New York One about her interest in being appointed to the U.S. Senate. Recently it seemed all but inevitable that she would take over Hillary Clinton's seat. Well, scratch that. Late last night, she issued a one-line statement dropping out of contention for what she called personal reasons.

Now there have reports of a nanny problem or tax trouble. But her spokesman put out a statement this evening saying quote, "Caroline Kennedy withdrew her name from consideration from the United States Senate for personal reasons. Any statements to the contrary are false. The governor set up a fair and deliberative selection process. This kind of mud slinging demeans that process and all those involved."

Of course there, are also questions about whether Kennedy withdrew because of her uncle, Senator Ted Kennedy's battle with cancer. That has been reported as well. But tonight, one source tells CNN the governor never actually had any intention of picking her.

So what on earth is really going on behind the scenes? We're going to get details now from the man who interviewed Caroline Kennedy for New York One, senior political reporter Dominic Carter and back again with us, "Time Magazine's" Mark Halperin as well.

So, guys this is a mystery to unravel here, Mark. Governor Paterson is saying that nothing came out in her vetting process that would have disqualified. But are you reading these reports, "New York Times" and elsewhere, nanny problems potentially or tax troubles. What's going on?

HALPERIN: Well, it depends on who you ask. There is a big mystery here for several reasons. One reason is neither Governor Paterson nor Caroline Kennedy have cohesive message operations. They haven't talked to the principals, come up with an explanation of how they want to describe what happened.

So within the Paterson camp, within the Kennedy camp, you can hear a range of opinions and very definitive sounding explanations about the chronology of what happened. I think it's fair to say that she believed she had a good chance to be picked up until the end, but that she didn't think she had a definitive chance. Her camp never thought it was obvious and definitive that she was going to be picked.

BROWN: Dominic, as Mark just pointed out, lots of conflicting stories also about whether the job was ever really hers. You have heard different things. But you spoke to him about that this recently and what is he telling you?

DOMINIC CARTER, NY1 SR. POLITICAL REPORTER: The conversations I had with Governor Paterson, Campbell, it was at the inauguration, at one of the balls. Off the record conversation. It was a private conversation, but I can tell you definitively, it appears all systems were a go. That Paterson was going with Caroline Kennedy and I'm quoting four sources of people close to the governor now and I'm quoting, "He was there," in referring to possibly going with Caroline Kennedy.

I know for a fact the governor was caught completely off guard when she called him and then later when she dropped out of this.

BROWN: So I don't want to be too Machiavellian in terms of how I'm thinking about this, but is it not possible, Mark, that Governor Paterson would love everyone to think that she he was about to pick her, given that she has a very close relationship with President Obama, and the last thing the governor wants to do is irk or annoy the new president by choosing someone else so doesn't it serve him better for her to drop out?

HALPERIN: Maybe, but that begs the question of what did he get her to drop out. Did he say something to her privately?

It's clear that they have talked lately. It is clear as Dominic said that many people around the governor thought that he was going to pick her, but now we have people around the governor saying he never intended to pick her, including to CNN. I think that the governor is an unpredictable figure. It's unpredictable who he is going to pick tomorrow. He has announced he is going to make his selection.

And I think she badly mishandled her candidacy. Although again it's an unorthodox selection. She just had to appeal to the governor. It's also clear and you can hear this from sources in both camps, and what I've tried to do is to look to see what both sides agree on. The governor was not pleased with the way she handled herself in this process. He thought she talked too much to the press, not well enough to the press, not managing how New Yorkers were viewing and that clearly played a role of how he saw her.

Whether it was definitive and he wasn't going to pick her, I don't know.

BROWN: Dominic, would you agree with Mark? You did the one television interview with her. You've heard a lot of people say what he just said.

CARTER: I agree with almost everything mark has said in terms of how this has gone down. The governor - I would like to point this out. He is very unpredictable. So as we speak, I'm told that he is deciding who he is going to announce tomorrow at noon, but it could all change. That's just the type of person he is but I know definitively, Tuesday night at about 11:00 p.m., all systems were a go. And he was in a good mood. And this is ...

BROWN: Let's go back to the point about him being somewhat disappointed in how he handled it.

CARTER: He hasn't talked to me about the rollout. I can't really talk about how the governor perceived the rollout. I do feel it has been somewhat unfair. The media coverage. Mark will probably, I don't know -- he may disagree on that I feel it was a bit of piling on. Those of us that have been in broadcasting for 20 years, we still stumble sometimes and say, "um", or we may not do it perfectly all the time. I think it was a lot of piling on as far as media coverage of Caroline Kennedy.

HALPERIN: I think she got a fair shake and she didn't handle herself well.

BROWN: All right. We'll end on that note.

Mark and Dominic Carter, good to have you here. Appreciate it. Thanks, guys.

When we come back, some truly stunning behind the scene images from the inauguration from a very privileged point of view. You'll see.

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BROWN: There are many memorable images of President Obama's inauguration, but if you think have you seen everything, trust me, you haven't. Tonight, we give our "Bull's Eye" to "Time Magazine" photographer Callie Shell-Aurora who took some really pretty extraordinary behind the scenes pictures of the new president. They are in the new edition of "Time," and we asked her to tell us some of the stories behind her pictures. Take a look.

CALLIE SHELL-AURORA, "TIME" PHOTOGRAPHER (voice-over): The Inauguration Day is a very special day. Not just a special day for the president and the first lady coming in. But it's a special day for the whole country, especially this one.

(on camera): But I have to say this is the most personal one, because I had actually been with the person from beginning end, of starting this campaign.

(voice-over): So I just think it's an amazing process. I know the staff. There are many of them there that have worked there since Kennedy or near that time. And I know that when I left the White House, the one thing they had said was someday it would be really wonderful to serve a black president.

You go through a practice, he was adjusting his lapel pin to make sure it looked OK. And not make sure he located OK. OK, I have got this pin, make sure that looks good. Make sure I carry it out right. Make sure I don't block the cameras with my hands

And I just think Michelle the whole time. It was so obvious all day long that she was looking at him with pride. They are very lucky to have these two children that understand the importance of what their father is doing, means to their generation.

Sasha is a skipper and dancer and run-arounder. So I think -- she had taken her shoes off and they sat down in a chair and fixed the shoe. But I think having the girls there, I don't -- I think it means a lot to kids. They are these real people. They really do have this -- Michelle and Barack Obama have this amazing relationship as a couple, as best friends, their support for each other is amazing, and they are just like every other parent. They are trying to balance work and balance their family.

BROWN: Pretty amazing pictures. That does it for us tonight. LARRY KING LIVE starts right now.